CAS 2023 A 9404
CAS · Football (FIFA / CAS) · Switzerland · 6 Nov 2023
Why it matters
This case is significant for clarifying the interplay between private transfer agreements, FIFA regulations on training compensation, and the principle of res judicata in sports arbitration. It highlights the importance of clear contractual drafting regarding 'full and final settlement' clauses to avoid subsequent claims for training compensation. The CAS panel's decision to partially uphold the appeal, while confirming the binding nature of FIFA's confirmation letter, provides guidance on the scope of res judicata in multi-tiered dispute resolution within football.
Summary
Huddersfield Town Association Football Club (HTAFC) transferred a player, Mr. Gonzalo Ávila Gordon, from RCD Espanyol de Barcelona (RCDE) in September 2020. The Transfer Agreement included a clause (9d) stating that the transfer fee was in 'full and final settlement of any and all claims' RCDE might have against HTAFC regarding the player's registration. It also had an indemnity clause (10) for breaches of warranties. Later, RCDE claimed additional training compensation from HTAFC, arguing it was due under FIFA Regulations on the Status and Transfer of Players (RSTP) and not covered by the transfer fee. FIFA's Dispute Resolution Chamber (DRC) issued a proposal, which became binding when HTAFC failed to reject it in time, ordering HTAFC to pay EUR 342,246.57 plus interest. FIFA's Disciplinary Committee (DC) then fined HTAFC for non-payment. HTAFC appealed this to the Court of Arbitration for Sport (CAS) (First CAS Proceeding), arguing the FIFA decisions were based on an 'obvious mistake' and that RCDE had breached the Transfer Agreement. The First CAS Award dismissed HTAFC's appeal, confirming the FIFA DC decision as 'purely disciplinary' and stating that HTAFC's claims for damages based on contractual breaches fell outside its mandate. Following this, HTAFC paid the amounts ordered. However, HTAFC then filed a claim before the FIFA Players' Status Chamber (PSC) against RCDE for damages, alleging breach of the Transfer Agreement's warranties (clauses 9d and 9e) and seeking indemnification for all losses incurred, including the training compensation paid to RCDE and a third-party club (Nastic). RCDE counterclaimed for an unpaid third installment of the transfer fee. The FIFA PSC declared HTAFC's claim inadmissible based on res judicata but partially accepted RCDE's counterclaim, ordering HTAFC to pay EUR 340,000 plus interest. HTAFC then appealed this FIFA PSC decision to CAS (this current proceeding). The dispute was governed by FIFA Regulations on the Status and Transfer of Players (RSTP) and subsidiarily by Swiss law, as per clause 22 of the Transfer Agreement and CAS Code Article R58. Key legal principles included contractual interpretation (Swiss law, particularly Article 18 CO on common subjective will and objective construction), and res judicata (Swiss law, focusing on identity of parties, object, and facts). The CAS Panel partially upheld HTAFC's appeal. It found that the FIFA Confirmation Letter (which ordered the initial training compensation) had binding effect, and therefore, HTAFC's claim to reclaim the EUR 342,246.57 paid to RCDE was inadmissible due to res judicata. The Panel reasoned that the subject matter (whether RCDE was entitled to that specific training compensation) had already been decided. However, the Panel found that HTAFC's claim for damages related to the training compensation paid to Nastic (EUR 29,260) was admissible. It interpreted clause 9(e) of the Transfer Agreement (RCDE warranting no other club would claim against HTAFC for the player's registration) to include third-party training compensation claims. RCDE was found to have breached this warranty. The Panel rejected HTAFC's claims for the FIFA DC fine and costs from the First CAS Proceedings, finding no adequate causality with RCDE's alleged breach; these were deemed consequences of HTAFC's own actions (failure to object in time). Regarding RCDE's counterclaim for the EUR 340,000 third installment, the Panel confirmed it was due. Applying the principle of set-off (Article 120 CO), the Panel allowed HTAFC to deduct the EUR 29,260 (paid to Nastic) from the EUR 340,000 owed to RCDE. Therefore, HTAFC was ordered to pay RCDE EUR 310,740 (340,000 - 29,260) plus 5% interest. HTAFC was ordered to bear the arbitration costs and pay CHF 5,000 to RCDE as a contribution to legal fees. FIFA was to bear its own costs. The award concludes the proceedings, with the final payment amount and cost allocation determined.
The detail
Parties: Huddersfield FC v. RCD Espanyol & FIFA
Case number: CAS 2023 A 9404
Outcome: Huddersfield Town FC's appeal was partially upheld, reducing the amount it owed to RCD Espanyol for training compensation from EUR 340,000 to EUR 310,740 plus interest, and ordering Huddersfield to bear the arbitration costs and pay CHF 5,000 to RCD Espanyol.
Quantum: EUR 310,740 plus 5% interest p.a. from 26 June 2022 to RCD Espanyol; CHF 5,000 to RCD Espanyol for legal fees; arbitration costs to be borne by Huddersfield Town FC.
Applicable law: FIFA Regulations on the Status and Transfer of Players (RSTP), Swiss law, and the Transfer Agreement between Huddersfield Town FC and RCD Espanyol.
Issues in play: The core dispute revolved around the interpretation of the Transfer Agreement's clauses, particularly 9(d) and 9(e) concerning 'full and final settlement' and indemnification for third-party claims, in light of FIFA's regulations on training compensation and the principle of res judicata under Swiss law. Huddersfield argued that the transfer fee included all training compensation, while Espanyol claimed additional amounts.
Read the full decision at Court of Arbitration for Sport (football, via FIFA) ↗
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